Libs at odds over tax cuts for working Aussies

SHADOW treasurer Joe Hockey today pulled his own leader into line by discounting speculation a Coalition government would match Government tax cuts and pension rises.

Mr Hockey said he would not make commitments until he had seen "the state of the books" just before the September 14 election.

"I can't look people in the eye here and make promises that we cannot deliver. I will not do it. I won't," said Mr Hockey.

However, Opposition Leader Tony Abbott has left wide open the possibility of matching tax cuts and has contested assumptions they would not be delivered.

This would mean the Coalition would have to find some $4.4 billion a year in savings to fund pension increases, income tax cuts and extra payments to families made under the carbon pricing scheme.

"No, don't assume that. We'll fund them out of savings to unnecessary and wasteful government spending. We won't fund them with a carbon tax," said Mr Abbott on Monday on the Nine network.

And Mr Abbott told The Australian in an interview published today that while a Coalition government would abolish carbon pricing, it would not eliminate all the compensation given through tax and pension changes.

"Now if you don't have the carbon tax you don't need the compensation, but we will continue to fund tax cuts and pension increases," said Mr Abbott.

Joe Hockey today took a much tougher position as he accused Prime Minister Julia Gillard of promising $1billion a day in extra spending during her western Sydney visit.

"Quite obviously we are waiting to see the state of the books," Mr Hockey said in Parramatta.

"I'm not going to be making commitments that we cannot pay for. We are not going to make promises that are based on assumptions about the state of the books at this money..."

On Monday, however, Mr Hockey indicated there would be Coalition tax cuts.

"We will be a Government that lives within its means because we know that's what you have to do," he said.

"The Coalition will also fund a tax cut without a carbon tax because we understand that many Australians are doing it tough."

The Opposition is facing increased pressure on its fiscal policy after the Government claimed that in government the Coalition would remove benefits worth more than $2000 a year to western Sydney families.

However, senior Opposition figures have declined to explain what would happen to programs such as the School Kids Bonus worth just over $400 a year for a primary pupil, and whether it would withdraw the extra assistance to pensioners.

Treasure Wayne Swan said Mr Hockey and Mr Abbott today had "run a hundred miles from each other on their tax hikes to working people".

"We had Tony Abbott trying to fudge and mislead in the papers this morning but it didn’t take long for Joe Hockey to show their real colours," said Mr Swan in a statement.

"Joe Hockey has clearly said that he couldn’t care less about the tax cuts going to over seven million Australian workers. In all my time in politics I've rarely seen a clearer statement of who the Liberal Party looked after compared to who the Labor Party represents."